Alternative Investments
From The Report: Saudi Arabia 2015
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A growing role for the private sector has brought greater investment opportunities in Saudi Arabia, with both domestic and international players taking a greater interest in the local market. With the stock exchange opening its doors to foreign investors and a recovery in the number of IPOs, significant capital inflows are expected in the short to medium term. A number of corporate and private investors have increasingly started to deploy their assets in venture capital, and several angel investor networks have been established. Foreign interest is also on the rise with international private equity players paying closer attention to the Saudi market, attracted by its size, growth rates and large domestic consumer market. Elsewhere, the government has stepped up its efforts to enhance the level of corporate governance in family-owned businesses, in a bid to further streamline private sector involvement.

Articles from this Chapter

Overview

Entering a new phase: A growing role for the private sector has brought new investment opportunities
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Thanks to its large population, a renowned hydrocarbons industry and an increasingly diverse non-oil sector, Saudi Arabia is one of the world’s wealthiest nations and a member of the G20 group of major economies. IMF data shows its GDP to be larger than that of advanced economies such as Sweden, Norway and Austria, as well as those of Middle East and African giants such as Egypt and Nigeria. Strong Credentials Within the GCC, it is home to the largest single slice of private wealth, accounting…

Analysis

Entrepreneurial environment: Government efforts signal encouragement for stand-alone private initiatives
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Given the size and breadth of the Saudi Arabian economy it is at first glance surprising that the government continues to play the leading role in supporting local start-ups and entrepreneurs. Where other countries in MENA, such as Egypt and Jordan, have seen the private sector address the segment through angel and seed investment operations, initiatives of this kind have only recently emerged in the Kingdom. This is partly a result of Saudi Arabia’s economic strengths in other areas: the easy…

Analysis

Added interest: Foreign private equity firms are playing a growing role in the local market
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While the domestic private equity (PE) sphere continues to grow, international players are also paying closer attention to the Saudi market. In April 2015 the US buyout firm TPG Capital inked a deal that gave it majority stake in the family-owned fast food chain Kudu, a transaction which according to earlier reports valued the Saudi Arabian company at between $400m and $500m. With around 200 outlets in the country, Kudu has built a robust brand in the Kingdom and is therefore positioned to benefit…

Analysis

A clearer framework: New corporate governance guidelines come into play for family-owned businesses
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The corporate governance regimes of Saudi Arabia’s family-owned businesses (FOBs) are a salient talking point in financial circles, for obvious reasons. Estimates as to their contribution to GDP vary, but a 2012 study by the Jeddah Chamber of Commerce & Industry claimed that the Kingdom’s FOBs in that year accounted for around SR350bn ($93.28bn), or 25% of the total. At that time, there were around 5000 FOBs in the country, 156 of which were listed on the Saudi Stock Exchange. Their importance…